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As we grapple with the disastrous pandemic, recession, and climate change, the nation is in desperate need of the year-end package President Trump is refusing to sign. In addition to emergency aid for families and businesses, it includes the Energy Act of 2020, which would invest in a spectrum of technologies to reduce climate pollution and jumpstart the economy.
The bill is not perfect. But it contains $35 billion in clean energy innovation spending authorizations—and packs more weight than expected in today’s political climate. And it gives the Biden-Harris Administration a head start on “Building Back Better.” After four years of inaction, this package is a win that lays the foundation for serious investment in the clean energy economy and reductions in air pollution that will have benefits for both climate change and our health.
A Win for the Climate
The Energy Act is the most impactful climate legislation that Congress has passed in a decade. It takes a technology-neutral approach to climate change and invests in the full range of low- and zero-emitting technologies to protect our air, water, and climate—including wind, solar, hydrogen, energy storage, energy efficiency, existing and advanced nuclear, and carbon capture technologies. Critically for the climate, lawmakers paired the Energy Act with provisions requiring an 85% phase-out of ultra-potent climate pollutants called hydrofluorocarbons (HFCs) in the next 15 years. It also extends several clean energy tax credits to support the continued build-out of wind, solar, fuel cell, biofuel, electric vehicle, and carbon capture and storage resources.
Climate is not a zero-sum game: This bill will result in meaningful emissions reductions that, even if they don’t get us to net-zero by 2050 on their own, lay the groundwork for future, stronger climate legislation.
Americans want to see their representatives take climate action. This package is lawmakers’ chance to start delivering.
A Win for Jobs
The Energy Act will also deliver jobs and economic benefits to every state and community. Its reauthorizations of energy efficiency programs, for example, will start getting Americans to work now to reduce energy waste and utility bills, while the additional investments the bill makes in American manufacturing and innovation will help make US workers more competitive globally and create new clean energy jobs in the future.
The bill authorizes 17 clean energy demonstration programs that will help take these technologies from the lab into the commercial market, supporting job growth for decades. In the midst of an urgent economic crisis, though, it’s important to note that these demonstration projects will also create thousands of jobs in the very near-term. We partnered with Industrial Economics (IEc) to model a range of clean energy policies (public data forthcoming), including five of the demonstration projects that are included in the Energy Act. The numbers of new jobs and economic growth speak for themselves:
Energy storage: An average of 1,400 jobs and a GDP increase of $203 million
Enhanced geothermal: An average of 150 jobs and a GDP increase of $22 million
CCUS R&D and engineering designs: An average of 1,900 jobs and a GDP increase of $260 million
CCUS commercialization: An average of 8,200 jobs and a GDP increase of $1.1 billion
Advanced nuclear: An average of 4,000 jobs and a GDP increase of $513 million
The window to benefit from these investments grows smaller every year. Energy technologies constantly evolve, but Congress hasn’t passed a comprehensive energy bill in over a decade. Without this investment, the United States would have fallen even further behind our global competitors, many of whom are trying to capture the expanding market for cleantech. The United States now ranks14th among nations on how much it spends annually on public energy R&D, relative to national GDP. We must do better, and now we can.
A Win for the Biden Administration
Enacting this bill now gives the incoming Biden Administration a running start on climate, making it easier to enact an even stronger clean energy policy in 2021.
By increasing authorizing levels for clean energy R&D, demonstrations, grant programs, and technical assistance, the Biden Administration will receive the clearest direction that Congress has given the executive branch in years to prioritize innovation across all clean energy technologies. This will be particularly helpful as the administration develops its budget request. While many pieces of this year-end deal came together quickly, most of the Energy Act is made up of dozens of bills that the Senate Energy and Natural Resources, House Energy and Commerce, and House Science, Space, and Technology Committees debated and resolved over the past two years, often with bipartisan support. That gives Biden and Democrats a much stronger hand in budgetary and appropriations negotiations next year.
If President Trump gets out of the way, the Energy Act will be the most impactful climate-related measures enacted by the federal government in a long time. However, it must only be the start. Congressional Republicans must show the same willingness to appropriate funding for clean energy in 2021 as they were in authorizing it at the end of 2020. And every climate and clean energy advocate should hold the GOP’s feet to the fire to make sure it gets done.
Josh Freed is the Senior Vice President of Third Way’s Climate and Energy Program and Ryan Fitzpatrick is the Director of Third Way’s Climate and Energy Program.
Wind power has overtaken coal as a proportion of Texas’s power for the first time and promises to continue growing. In 2020, wind power made up almost a quarter of Texas’s total power, compared to just 18% from coal.
Why This Matters: Texas is the nation’s largest producer of both wind energy and fossil fuel energy.
The sale of oil and gas drilling rights in the Arctic National Wildlife Refuge (ANWR) was supposed to bring in upwards of $1 billion, but in the end, the first of the auctions mandated by Congress at the urging of President Trump brought in only $14M.
Why This Matters: Banks won’t underwrite Arctic drilling, so it is unclear those ANWR leases will be drilled ever.
When 2020 began, even with oil prices relatively strong, many industry analysts were predicting it was the beginning of the end for oil and gas. And then the pandemic hit and the Saudis and Russians decided to take advantage of the downturn. With supplies still high and demand declining, the industry may never be the same again.
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